The UK's biggest newspaper and magazine wholesaler has said it is considering its options following the collapse of convenience store chain McColl's last week.
Swindon-based Smiths News serves around 600 McColl's stores. It said McColl's represented a "bad debt risk" to the company of £6-7m, with £1.2m of that overdue. It confirmed its banking covenants would not be impacted by the news.
"The company is closely monitoring the current situation and considering options for reducing the current risk, including the return of unsold stock," Smiths News said in a statement.
Smiths News, which supplies 24,000 retailers across England and Wales, said a further update would be announced in due course.
McColl's fell into administration on Friday (May 6) after struggling badly during the pandemic due to supply chain issues, inflation and a heavy debt burden. The collapse has put some 16,000 jobs at risk.
The billionaire Asda-owning Issa brothers have tabled a final offer to rescue the chain. Blackburn-headquartered EG Group, whose brands also include LEON, Cooplands and Euro Garages, has bowed to pressure to look after McColl's pension liabilities, in a move that means that its 2,000 members will avoid a cut of up to 20% to their promised pensions over their lifetimes.
Trustees for the McColl's pension schemes have called on the Business Secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.
Morrisons also submitted a final bid to take over McColl's prior to the administrators' Sunday 6pm deadline for offers. The two businesses are major partners, with McColl's operating hundreds of convenience shops under the Morrisons Daily brand.
McColl's is among a long list of high street chains that have fallen into financial difficulty during the pandemic. In 2022, a number of big name brands have already gone bust, including TM Lewin and Sofa Workshop.
